Merrill Lynch is likely to follow the example of wirehouse rivals UBS and Morgan Stanley in exiting the Broker Protocol, recruiters tell InvestmentNews. And it could happen within the next three weeks, they tell the publication. But the protocol may survive if for no other reason than a lack of a decent alternative, industry observers say.

Finally, regulators may take issue with an environment in which clients’ rights are hurt because they have difficulty moving with their advisors, Brian Hamburger, founder of MarketCounsel, which helps advisers go independent, tells the news service.

Posted in MarketCounsel | Comments Off on “…regulators may take issue with an environment in which clients’ rights are hurt because they have difficulty moving with their advisors.” @HDelux speaks with Alex Padalka @FinAd_IQ.

The idea of a “protocol 2.0” has been bouncing around for some time, but getting hundreds of members with competing interests to agree on revisions would likely prove a daunting task. And a return to the pre-2004 legal wars could breed animosity and raise costs all around.

Another option would be for the Securities and Exchange Commission to clarify client privacy regulations to define what data departing advisers can take with them, rather than leaving it to the industry, said Brian Hamburger, founder of MarketCounsel, which helps advisers go independent.

“The only viable solution is for regulators to take note of the impact on clients” of barriers involving the movement of advisers, Hamburger said. “Once you lock up clients, or make it difficult to move with advisers, you’re hurting clients’ rights.”

MarketCounsel, a regulatory compliance firm in Englewood, N.J., continues to express its outrage over the perceived sleight of hand by UBS in concert with its law firm, Bressler, Amery & Ross, P.C. — the firm that keeps the protocol list — in turning a 10-day warning into a five-day warning. The firm issued a statement detailing its efforts to gain access to information, which reads in part:

“The only thing surprising about UBS’ announcement today is its timing. Rumors swirled last week that another wirehouse would be withdrawing from the Protocol around Thanksgiving. Yet the Protocol administrator’s weekly update arrived last Monday, Nov. 20 without any major firm withdrawing …. On Monday, Nov. 13 we learned that two additional firms withdrew from the Protocol, however we should have learned about that the week prior, on Nov. 6th and 9, when the two firms actually submitted their respective notices of withdrawal.”

“Bressler stands in conflicted position, serving as counsel to UBS and Morgan Stanley, making it incapable of discharging its duties as Protocol administrator without, as here, protecting its clients in the process. Bressler kept Morgan Stanley’s notable withdrawal embargoed for seven of the 10 days and has presumably now done the same with UBS, making a mockery of the Protocol 10-day notice provision.”

UBS is withdrawing from the Protocol for Broker Recruiting Agreement, making it the second wirehouse and original member of the arrangement to do so after Morgan Stanley withdrew from it in October. UBS did not comment on Bressler Amery Ross’ procedure for publicly sharing the notifications of withdrawals.

“Bressler hasn’t passed along the notice of withdrawals it has received to the other signatories in a timely manner. Worse, this cannot be overlooked as a mere omission,” Ash said in a statement. “Bressler affirmatively refused to disclose withdrawals upon receipt–first ignoring my requests, then after multiple emails and calls, denying my requests.” Ash also said in a statement last week that she learned on Nov. 13 that two additional brokerages had submitted withdrawal letters from the protocol agreement on Nov. 6 and Nov. 9, respectively. But she said the law firm should have notified her legal firm prior to Nov. 13, when Bressler Amery Ross releases its weekly report brokerages joining and leaving the agreement. Hamburger Law Firm helps financial advisors transition from one firm to another, often with a coordinated plan of action to bring clients along with them.

Posted in MarketCounsel | Comments Off on @BresslerLaw “hasn’t passed along the notice of withdrawals it has received to the other signatories in a timely manner”. Sharron Ash @HamburgerLaw speaks with @Mike_Thrasher @wealth_mgmt.

UBS is withdrawing from the Protocol for Broker Recruiting Agreement, making it the second wirehouse and original member of the arrangement to do so after Morgan Stanley withdrew from it in October. UBS did not comment on Bressler Amery Ross’ procedure for publicly sharing the notifications of withdrawals.

“Bressler hasn’t passed along the notice of withdrawals it has received to the other signatories in a timely manner. Worse, this cannot be overlooked as a mere omission,” Ash said in a statement. “Bressler affirmatively refused to disclose withdrawals upon receipt–first ignoring my requests, then after multiple emails and calls, denying my requests.” Ash also said in a statement last week that she learned on Nov. 13 that two additional brokerages had submitted withdrawal letters from the protocol agreement on Nov. 6 and Nov. 9, respectively. But she said the law firm should have notified her legal firm prior to Nov. 13, when Bressler Amery Ross releases its weekly report brokerages joining and leaving the agreement. Hamburger Law Firm helps financial advisors transition from one firm to another, often with a coordinated plan of action to bring clients along with them.

Posted in MarketCounsel | Comments Off on @BresslerLaw “hasn’t passed along the notice of withdrawals it has received to the other signatories in a timely manner”. Sharron Ash @HamburgerLaw speaks with @Mike_Thrasher @wealth_mgmt.

UBS is withdrawing from the Protocol for Broker Recruiting Agreement, making it the second wirehouse and original member of the arrangement to do so after Morgan Stanley withdrew from it in October. UBS did not comment on Bressler Amery Ross’ procedure for publicly sharing the notifications of withdrawals.

“Bressler hasn’t passed along the notice of withdrawals it has received to the other signatories in a timely manner. Worse, this cannot be overlooked as a mere omission,” Ash said in a statement. “Bressler affirmatively refused to disclose withdrawals upon receipt–first ignoring my requests, then after multiple emails and calls, denying my requests.” Ash also said in a statement last week that she learned on Nov. 13 that two additional brokerages had submitted withdrawal letters from the protocol agreement on Nov. 6 and Nov. 9, respectively. But she said the law firm should have notified her legal firm prior to Nov. 13, when Bressler Amery Ross releases its weekly report brokerages joining and leaving the agreement. Hamburger Law Firm helps financial advisors transition from one firm to another, often with a coordinated plan of action to bring clients along with them.

Posted in MarketCounsel | Comments Off on @BresslerLaw “hasn’t passed along the notice of withdrawals it has received to the other signatories in a timely manner”. Sharron Ash @HamburgerLaw speaks with @Mike_Thrasher @wealth_mgmt.

Morgan Stanley has locked the gates to keep its high-priced wealth management brokers from fleeing.

“I think there are a large collection of advisers upset and who feel they have been gamed,” said Sharron Ash, chief litigation counsel for the Hamburger Law Firm. “They joined Morgan [Stanley] under the protocol and now the rug has been pulled out from underneath them. I do expect there is going to be litigation as a result of the Morgan [Stanley] decision,” said Ash. “I don’t think Morgan Stanley is dropping out of the protocol without the intention of enforcing its restrictive covenants.” Ash further stated, “Clients could have their relationships with an adviser of their choice interrupted for a period of time. They may not even be able to find their adviser once they leave a firm.”

Posted in MarketCounsel | Comments Off on “There’s really only one way to ‘fix’ the protocol – it’s for the SEC to amend Regulation S-P to codify the broker protocol for all” @newsfromIN editorial from Sharron Ash @HamburgerLaw.